In Spain, Low Wages Become Increasingly Common

People line up outside an unemployment office in Madrid in February. The country has the eurozone's highest unemployment rate at more than 21 percent.

Arturo Rodriguez
/ AP

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Originally published on November 8, 2011 11:46 am

David Horcajada fishes a beer can out of his backpack at a Madrid square.

"Five years ago, believe me, there were really few people drinking on the streets," he says. "Right now, everybody is drinking on the street because people cannot afford to pay for drinks at bars. So since we're Spanish and we do drink, we party a lot, so it doesn't matter if we don't have money. We'll keep doing it."

Many in the crowd are what locals call mileuristas — workers on temporary contracts that pay 1 mil (1,000) euros a month, barely $1,400. That's considered below the poverty line for a family in Spain, and just above it for a single adult. The word used to have a negative connotation. But not in this economy, Horcajada says.

"When Spain was booming, like five years ago, just really young people, normally uneducated, were mileuristas," he says. "The thing is that right now, a lot of people are becoming mileuristas, and a lot of people would like to become mileuristas, if they could."

Ester Sanz would love to join the ranks of mileuristas. She's a certified teacher but can't find a full-time job.

"I finished my degree in June last year, and I have a job, but it's only for one hour a day, so it's only 200 euros, but nothing else," she says.

On 200 euros a month, less than $300, she has to live with her parents and clip coupons.

"You try to go with the offers, 'One Euro Wednesday' and things like that, and try to save money, as much as you can," she says.

A Scarcity of Jobs

More than one in five lives below the poverty line in Spain, which has the eurozone's highest unemployment rate at more than 21 percent. For young people, the rate is more than double that. Even for those who have jobs, a third are on temporary contracts, with low pay and no benefits.

"This is what young people do. And they're lucky; they've got a job," says Gayle Allard, an economist at Madrid's IE Business School. "Because the unemployment rate for young people is 46 percent. So, they're the outsiders in the labor market."

Spain has a two-tiered labor system. Workers have either temporary contracts or jobs for life. It's a key issue in national elections Nov. 20. But it's also the third rail of Spanish politics, where unions are powerful, Allard says.

"When somebody talks about labor-market reform, they think they want to turn the market into something like the U.S. market," she says. "But what they don't realize is that they've got 30 percent of their workers with no job security whatsoever, in really inferior conditions, so that the others can enjoy the kind of job security that they have."

In the plaza, Horcajada describes how his generation increasingly makes do on 1,000 euros a month.

"Either you live with your parents, or you share an apartment. The problem is, if you're a mileurista and you're, for example, 30 years old, you're not going to be sharing an apartment when you're 30 years old," he says. "You want your own apartment and your own life. If you're earning 1,000 euros, there's no way you're going to be able to do that in Spain. It's not a cheap country."

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RENEE MONTAGNE, HOST:

And finally to Spain, where more than one in five people live below the poverty line. With the Eurozone's highest unemployment rate, Spain recently eased restrictions on how long companies there can keep workers on temporary contracts. The idea is, it's better to have people employed temporarily, than be out of jobs altogether. Lauren Frayer reports from Madrid on how more and more Spaniards manage to make ends meet with low pay and no benefits.

LAUREN FRAYER, BYLINE: Welcome to a botellon, the Spanish term for drinking outdoors in city squares like this one in downtown Madrid.

DAVID HORCAJADA: Five years ago, believe me, there were really few people drinking on the streets.

FRAYER: David Horcajada fishes a beer can out of his backpack.

HORCAJADA: Right now, everybody is drinking on the street because people cannot afford to pay for, you know, drinks at bars. So since we're Spanish and we do drink and we party a lot, so it doesn't matter if we don't have money. We'll just keep doing it. And that's what botellon comes from.

FRAYER: Many in the crowd are what locals call mileuristas, workers on temporary contracts that pay a mil - a thousand - euros a month, barely $1,400. That's considered below the poverty line for a family in Spain, and just above it for a single adult. The word used to have a negative connotation. But in this economy? Not anymore, says Horcajada.

HORCAJADA: When Spain was booming, like five years ago, just really young people, normally uneducated, were mileuristas. The thing is that right now, a lot of people are becoming mileuristas, and a lot of people would like to become mileuristas, if they could.

FRAYER: Ester Sanz would love to join the ranks of mileuristas. She's a certified teacher but can't find a full-time job.

ESTER SANZ: I finished my degree in June last year, and I have a job, but it's only for one hour a day, so it's only 200 euros, but nothing else.

FRAYER: On 200 euros a month, less than $300, she has to live with her parents, and clip coupons.

: You try to go with the offers, one Euro Wednesday or things like that, and try to save money as much as you can.

FRAYER: Spain's jobless rate tops 21 percent, and it's more than double that for young people. Even for those who have jobs, a third are on temporary contracts, with low pay and no benefits. Gayle Allard is an economist at Madrid's IE Business School.

GAYLE ALLARD: This is what young people do. And they're lucky, they've got a job because the unemployment rate for young people is 46 percent. So they're the outsiders in the labor market.

FRAYER: Spain has a two-tiered labor system. Workers either have temporary contracts or jobs for life. It's a key issue in the national elections November 20th. But it's also the third rail of Spanish politics, where unions are powerful. Allard explains.

ALLARD: When somebody talks about labor market reform, they think they want to turn the market into something like the U.S. market. But what they don't realize is that they've got 30 percent of their workers with no job security whatsoever, in really inferior conditions, so that the others can enjoy the kind of job security that they have.

FRAYER: Back in the plaza, David Horcajada describes how his generation increasingly makes do on 1,000 euros a month.

HORCAJADA: Either you live with your parents or you share an apartment. The problem is, if you're a mileurista and you're, for example, 30 years old, you're not going to be sharing an apartment when you're 30 years old. You want to have your own apartment. You want to have your own life. And if you're earning 1,000 euros, there's no way you can do that in Spain. It's not a cheap country.